This invention relates generally to online systems, and in particular to presenting advertisements on an online system.
Presenting advertisements to users of an online system allows an advertiser to gain public attention for products or services and to persuade online system users to take an action regarding the advertiser's products, services, opinions, or causes. Conventional online systems select and present an advertisement to a user satisfying one or more targeting criteria associated with the advertisement; the online system then charges an advertiser associated with the presented advertisement based on a bid amount associated with the advertisement and provided by the advertiser. For example, an advertisement having a highest bid amount from a group of advertisements eligible for presentation to a user satisfying one or more targeting criteria associated with the advertisement is selected, and the advertiser associated with the selected advertisement is charged an amount based on the bid amounts of other advertisements eligible for presentation to the user.
Associating targeting criteria with advertisements allows advertisers to present advertisements to online system users having specific characteristics to increase the likelihood of users accessing advertisements or to expose specific users to advertisements. For example, targeting criteria identifies actions previously performed by a user to increase the likelihood of an advertisement associated with the targeting criteria being presented to a user likely to perform an action (e.g., install an application, make a purchase, etc.). As another example, targeting criteria identify demographic information of a user, so an advertisement associated with the targeting criteria is presented to online system users having particular demographic characteristics. While conventional targeting criteria may account for a likelihood of a user performing an action based on the advertisement, conventional targeting criteria does not account for the likelihood of a user performing subsequent actions with the content being advertised. For example, conventional targeting criteria does not account for an amount of money a user is likely to spend after installing an advertised application or accessing an advertised retailer, but merely accounts for the likelihood of the user installing the application or accessing the retailer.